SK Innovation have sent out almost no new orders to its suppliers during the second half of 2020, TheElec has learned.
This is due to its prolonged lawsuit over battery technology with rival LG Energy Solution.
SK Innovation was initially planning to put in orders around October in time with US International Trade Commission’s final judgment on the lawsuit between the two Korean battery companies.
But the commission has postponed the final judgment. SK Innovation will likely begin placing meaningful orders early next year.
Most of SK Innovation’s suppliers have been maintaining their business from remaining orders. Some of them are seeking orders from other battery companies at unfavorable conditions.
Uncertainty over the operation of SK’s factory in Georgina in the US remained high, people familiar with the matter said.
The commission, in a preliminary judgment, said SK Innovation has indeed stole LG Energy Solution’s technology. If the judgment holds, SK Innovation will no longer be able to export materials related to battery cell, module and pack to the US. The ripple effect will damage the company’s suppliers as well.
The only solution to this a settlement between LG Energy Solution and SK Innovation. SK Innovation was currently willing to pay 1 trillion won, but no more.
SK Innovation’s CAPEX last year was 3.7 trillion won. Around 1 trillion won was spent in battery facilities. It spent 340 billion won in orders to South Korean suppliers for its factory in Komarom, Hungary.